Over the past one year, a slump in oil prices was one of the major headwinds in the global economy. The absence of major production cuts from the Organization of the Petroleum Exporting Countries (OPEC), booming shale supplies in North America and a stagnant growth scenario in Europe and China weighed on oil prices over the past 10 months. Moreover, the Iranian nuclear deal, which has the potential to supply more oil, deteriorated the situation further.

The U.S. Energy Information Administration (EIA) also reported that U.S. crude inventories rose by 5.3 million barrels to 489 million barrels in the week ending April 17, driving crude stockpiles up for 15 consecutive weeks. For sometime now, crude oil inventories are hovering around the highest level in more than 80 years. The price of West Texas Intermediate (WTI) crude declined 0.8% to $56.16 per barrel on Wednesday following the report (read: Oil ETFs Crushed in Friday's Trading ).

 
Will Prices Recover?
 
Over the past one month, investor sentiment was boosted by a strong comeback in oil prices. The price of WTI crude oil gained more than 18% while Brent went up nearly 12% over the period. The gain in oil prices also had a positive impact on energy stocks, which in turn bolstered ETFs having a significant exposure to these stocks.
 
Meanwhile, the EIA projected that the U.S. can experience its first monthly decline in oil production in May in more than four years. The EIA expects oil production to decline by 57,000 barrels per day in May from April. Moreover, the agency now expects global demand to increase by 90,000 barrels a day to 93.6 million barrels a day. It is speculated that a rise in demand and a decline in production will help oil prices to improve further (read: 3 Energy ETFs Leading The Oil Rally).
 
Also, reduction in capital expenditure by several major companies and the political turmoil in the Middle East will continue to act as major catalysts to the oil price. Meanwhile, a flurry of merger and acquisition activity in the sector is also giving a boost to energy stocks (read: Oil ETFs Jump on Yemen Concerns & Weaker Greenback).

However, rising production in the OPEC region continued to pull back oil prices in recent times. In March, oil production in this region surged to a two-year high of 31.02 million barrels per day. Meanwhile, the dismal growth picture in China, the second largest consumer of oil, raised concerns about a further slump in oil prices. Moreover, a stronger dollar has made the greenback-priced crude more expensive for investors holding foreign currency (read: Short Oil ETFs in Focus as Crude Prices Keep Falling).
 
ETFs in Focus
 
The rally in oil prices over the last one month has boosted energy ETFs. This is evident from the monthly 6.5% gain of the ultra-popular fund Energy Select Sector SPDR (XLE), while the broad market fund (SPY) managed to gain only 0.1% over this period. In this scenario, we’ve picked three ETFs that gained at an impressive rate following the oil price rally. These ETFs will be in focus as long as the trend continues.
 
SPDR S&P Oil & Gas Equipment & Services ETF (XES - ETF report)

This fund provides equal weight exposure across 47 securities by tracking the S&P Oil & Gas Equipment & Services Select Industry Index. None of the firms accounts for more than 3.16% of the total assets. The product puts heavy focus on equipment and services at 72.3%, while drilling companies account for the remainder. The fund has amassed $267.9 million in its asset base while it sees solid volume of more than 320,000 shares a day. The ETF has 0.35% in expense ratio and gained 12.4% over the past one month.

 
SPDR S&P Oil & Gas Exploration & Production ETF (XOP - ETF report)
 
This fund follows the S&P Oil & Gas Exploration & Production Select Industry Index, holding 77 stocks in its portfolio. It is well diversified across its holdings with none of the companies accounting for more than 1.7% of the total assets. The ETF has been able to manage $1.9 billion in its asset base and is actively traded with about 11 million shares per day. It charges 35 bps in annual fees and expenses. The product gained more than 11.2% in the trailing one-month period (see: all the energy ETFs here).
 
Market Vectors Unconventional Oil & Gas ETF (FRAK - ETF report)
 
This fund provides exposure to 68 firms by tracking the Market Vectors Global Unconventional Oil & Gas Index. The fund has amassed $77.3 million in its asset base while it sees a moderate volume of around 41,000 shares a day. The product is largely concentrated in the top 10 firms that collectively make up for 52.7% share of the basket. About 82% of its assets are allocated to exploration and production. The ETF charges a fee of 54 bps annually and added 12.8% in the past one month.